Cargo Insurance Claims Guide: How to Get Paid & Avoid Rejection

The Ultimate Guide to Cargo Insurance Claims: Why 30% of Claims Fail (And How to Win Yours)

In global shipping, damage is an unfortunate reality. From the factory in China to your warehouse in the USA or Europe, your goods pass through cranes, trucks, rough seas, and multiple handling points. Even with the best packaging, weather conditions and human error are unpredictable variables.

While purchasing Marine Cargo Insurance is the smartest decision a savvy importer can make, simply having the policy doesn’t guarantee a payout. We have seen too many customers face rejection because they didn’t know the “Golden Rules of Evidence.”

This guide is not just about buying insurance; it is a step-by-step manual on how to file a successful claim when disaster strikes.

Part 1: Prevention is Better Than Cure

Before we talk about claims, let’s talk about your first line of defense: Packaging. Insurance companies have a clause called “Improper Packing.” If the surveyor determines the damage was caused because the box was too weak, they will deny the claim.

Kisun Shipping Pro-Tip:

• Fragile Goods: Ensure your supplier uses inner collision protection (bubble wrap/foam) and double-walled corrugated boxes.
• Palletization: Always request goods to be palletized and shrink-wrapped with “FRAGILE” and “DO NOT STACK” labels.
• Photos Before Departure: Ask your supplier or freight forwarder for photos of the cargo before the container doors are closed. This proves the goods left in good condition.

Part 2: Understanding Your Coverage (Port-to-Port vs. Door-to-Door)

Don’t assume your insurance covers everything until the goods are on your shelf.

• Port-to-Port: Coverage ends once the goods hit the destination port. The trucking to your warehouse is uninsured.
• Door-to-Door: This is what we recommend at Kisun Shipping. It covers the entire journey from the supplier’s factory to your final delivery address.

Note on Clauses: Most of our clients opt for ICC (A) – “All Risks” coverage. This offers the broadest protection against physical loss or damage from external causes.

Part 3: The Critical Moment – Receiving the Cargo

This is where 90% of failed claims happen. When the truck driver arrives, you are under pressure to unload quickly. But you must follow these steps:

1. The “Clean Receipt” Trap

If you sign the Proof of Delivery (POD) or Delivery Note without any remarks, you are legally stating: “I received the goods in perfect condition.” If you find damage later, the insurance company will argue the damage happened after delivery (in your warehouse).

2. What to do for LCL/Air Shipments

• Inspect the Outer Boxes: Look for crushed corners, holes, wet spots, or re-taped boxes.
• Annotate the POD: If you see any external damage, you MUST write it on the driver’s delivery receipt before signing.
  • Example: write “2 BOXES CRUSHED,” “PALLET BROKEN,” or “POTENTIAL DAMAGE SUBJECT TO INSPECTION.”
• Take Photos Immediately: Photograph the truck, the license plate, and the damaged boxes while they are still on the truck or pallet.

3. What to do for FCL (Full Container) Shipments

• Check the Seal: Ensure the seal number matches your Bill of Lading.
• Spotting Damage: If the container has holes or the goods have collapsed inside upon opening the doors, stop unloading. Take photos and notify your insurer immediately.

Part 4: How to File the Claim (The Evidence Checklist)

If you discover damage, keep calm and follow this 4-Step Protocol.

Step 1: The 96-Hour Rule

Time is money. You typically have a very short window to report damage.

• Apparent Damage: Must be noted on the POD immediately.
• Concealed Damage: If the box looked fine but the product inside is broken, you usually have 3 business days (approx. 72-96 hours) to report it. After this window, the claim is almost impossible to win.

Step 2: Preserve the Scene (Do Not Discard!)

Never throw away the packaging. The insurance surveyor may need to inspect the outer box to prove rough handling.

• Retain the damaged products.
• Retain the original shipping cartons and filling materials.

Step 3: The “Evidence Package”

To win your claim, you need to provide the following to the insurance company or your freight forwarder:

1. The Photos (The more, the better):
   • Wide shot: Shows the overall condition of the pallet/shipment.
   • Close-up: Shows the shipping label on the specific damaged box.
   • The Damage: Multiple angles of the broken product.
   • Video: For high-value loss or electronics, film an unboxing video or a “power-on” test to prove the device is dead.
2. The Documents:
   • Commercial Invoice & Packing List.
   • Bill of Lading (B/L).
   • The delivery receipt (POD) with your damage remarks. (Crucial!)
   • Statement of Claim (We will help you draft this).

Step 4: The Survey (For Major Losses)

For losses exceeding a certain amount (e.g., USD 2,000 or RMB 20,000), the insurance company will send a Lloyd’s Agent or independent surveyor to inspect the goods.

• Tip: Cooperate fully with the surveyor. Their report is the final verdict.

Part 5: Why Claims Get Denied? (Avoid These Mistakes)

1. Late Notification: You waited 2 weeks to open the boxes.
2. No Remarks on POD: You signed for the goods as “Clean” despite visible box damage.
3. Insufficient Packaging: The surveyor determined the supplier used cheap boxes unsuitable for sea freight.
4. Lack of Evidence: You threw away the crushed outer box before taking photos.

Frequently Asked Questions (FAQ) on Cargo Insurance for Shipping from China

What does cargo insurance cover for shipping from China? 
Major losses like weather/damage, but not delays/improper packaging.

How to avoid package damage in international shipping? 
Use sturdy boxes/pallets, confirm supplier methods, add labels.

FCL vs LCL insurance coverage differences? 
FCL lower risk (dedicated); LCL higher handling claims.

How to file cargo insurance claim for import from China? 
Notify within 96 hours, document fully, submit docs.

What evidence needed for import cargo damage claims? 
Photos/videos, delivery notes, surveys—retain packaging.

Freight insurance requirements for 2026 shipments from China? 
All-risk policies recommended; digital tools for faster claims.

Conclusion: We’ve Got Your Back

At Kisun Shipping, we don’t just move cargo; we protect your business interests. We work with top-tier insurance providers to offer comprehensive coverage. But remember, insurance is a contract that requires evidence.

By following the steps above—especially checking the boxes and noting damage on the delivery receipt—you ensure that if the worst happens, you will be fully compensated.

Have a shipment coming up? Contact us today for a quote that includes comprehensive “All Risks” insurance.

About the Author

Katherine Kang is a China-based logistics consultant with over 11 years of experience in international trade and freight forwarding. Specializing in helping SMEs import from China to the USA, Canada, and Europe, she focuses on compliant, cost-effective solutions to avoid delays, tariffs, and hidden fees. From anti-dumping guidance to CNY planning, Katherine has managed hundreds of shipments, saving clients 15-30% on average.

Connect with Katherine on LinkedIn or contact Kisun Shipping for a free import consultation.

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